What the total return will this bond provide over the


An investor would like to add the following bond to her portfolio. The bond would be held for 7 years and then sold. The investor has gathered the following information to analyze the bond:

Company XYZ

Currency: CAD

Face value: 1,200,000

Coupon: 6.4%, paid semi-annually

Bond maturity: 10 years

Coupon re-investment rate: 7.2%

Expected YTM at end of 7 years: 9.5%

Risk-free rate: 4.5%

What the total return will this bond provide over the investor's investment horizon?

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Finance Basics: What the total return will this bond provide over the
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